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Independent Committee of The Starr Foundation Announces Issuance of Its Report

Posted on March 5, 2007

New York, NY — The Independent Committee of The Starr Foundation announced today that it has completed a comprehensive and thorough investigation of the factual and legal issues raised in a report issued by the Office of the New York State Attorney General on December 14, 2005, and has issued its own report regarding its investigation of these issues.

The report of the New York State Attorney General’s Office, entitled “Report on Breaches of Fiduciary Duty by Executors of the Estate of Cornelius Vander Starr,” focuses on three transactions entered into by the executors of the estate of C.V. Starr in 1969 and 1970. The New York State Attorney General’s Office contends that, in each instance, the Executors breached their fiduciary duties to the Estate, and its residual beneficiary, The Starr Foundation, by selling assets of the Estate for far less than their actual value. Its report thus alleges that The Starr Foundation has possible claims for breach of fiduciary duty against the surviving executors of the Estate of Cornelius Vander Starr either (i) in their capacity as executors for entering into certain alleged conflicted transactions, or (ii) in their capacity as directors of The Starr Foundation.

The conclusion to the Executive Summary of the Independent Committee’s 174-page report states as follows:

After completing its investigation, and carefully considering the issues raised by the report issued by the Office of the New York State Attorney General, the Independent Committee of The Starr Foundation has determined that the executors of the Estate of C.V. Starr acted in good faith and prudently performed their duties, and that there is no basis for the report’s contention to the contrary. Accordingly, in the circumstances presented here, the Independent Committee has concluded that it would not be appropriate, nor would it be in the best interests of The Starr Foundation, to pursue any litigation or other course of action against the executors, whether in their capacity as executors or as directors of The Starr Foundation.

In response to the report of the New York State Attorney General’s Office and a recommendation made by that office in correspondence with The Starr Foundation, the Board of Directors of The Starr Foundation appointed an independent committee of disinterested persons on January 31, 2006, to investigate the issues identified in the report. The Board of Directors authorized, empowered, and directed the Independent Committee of The Starr Foundation to: (i) conduct its investigation by taking all action determined by the Independent Committee to be appropriate, including, without limitation, reviewing documents and interviewing witnesses; (ii) provide the results of such investigation to The Starr Foundation’s Board of Directors; and (iii) pursue all rights and remedies of The Starr Foundation, including pursuit of any litigation or other courses of action, which the Independent Committee may determine exist and are, in the reasonable judgment of that committee, in the best interests of The Starr Foundation to pursue.

During the course of its twelve-month investigation, the Independent Committee and its counsel have collected and reviewed over 650,000 pages of documents, and interviewed or received written responses to its questions from nearly all of the surviving participants or witnesses to the matters alleged in the report of the New York State Attorney General’s Office.

The Independent Committee consists of three members: Hon. William C. Thompson, a retired Justice of the Appellate Division of the Supreme Court of the State of New York, Second Department; Hon. C. Raymond Radigan, a former Surrogate of Nassau County; and Florence A. Davis, the current President of the Foundation and a member of its Board of Directors. None of the Independent Committee members had any involvement in any of the transactions at issue in the New York State Attorney General’s Office’s report, nor did any of them serve as Executors or as directors of the Foundation during any of the years in question.

Counsel to the Independent Committee are John J. Barnosky, Esq., and his law firm, Farrell Fritz, P.C., and Lawrence J. Zweifach, Esq., and his law firm, Heller Ehrman LLP.